2019 (5) TMI 1058 - AT - Income Tax

Penalty levied u/s 271(1)(b) - non compliance of notice u/s 271(b) as the assessment were framed u/s 143(3) showing that necessary co-operation was given by the assessee for completing the assessment proceedings - HELD THAT - Assessment orders have been framed u/s 143(3) of the Act it proves that the assessee had cooperated in the assessment proceedings and therefore we delete the penalty of 10, 000/- levied u/s 271(1)(b) of the Act. Penalty was not leviable for non compliance of notice u/s 271(b) as the assessment were framed u/s 143(3) of the Act showing that necessary co-operation was given by the assessee for completing the assessment proceedings.

Summary

Issues involved:
Penalty under section 271(1)(b) of the Income Tax Act for non-compliance with notices during assessment proceedings.

Analysis:
The Appellate Tribunal, ITAT Indore, heard three appeals by different assesses against the orders of the Commissioner of Income Tax (Appeals) related to the penalty imposed under section 271(1)(b) of the Act. The issues raised in these appeals were similar, so they were collectively addressed for convenience. The assessee's counsel argued that the penalty issue was in favor of the assessee based on a previous decision by the Co-ordinate Bench. The Departmental Representative, on the other hand, supported the lower authorities' orders. After considering the arguments and reviewing the records, the Tribunal noted that the penalty of ?10,000 under section 271(1)(b) was imposed for non-compliance with notices during assessment proceedings.

Upon further examination, the Tribunal found a similar issue had been addressed previously by the Co-ordinate Bench, which had ruled in favor of the assessee. The Tribunal referred to a specific case where the penalty was deemed not leviable for non-compliance with notices under section 271(b) since the assessment had been completed under section 143(3) of the Act, indicating the assessee's cooperation in the assessment proceedings. Applying this precedent to the current case, where assessments were also completed under section 143(3) of the Act, the Tribunal concluded that the penalty of ?10,000 was unjustified. Consequently, the Tribunal decided to delete the penalty in all three appeals, as it was evident that the assesses had cooperated in the assessment proceedings.

In light of the above analysis and following the decision of the Co-ordinate Bench, the Tribunal allowed all three appeals and deleted the penalty of ?10,000 levied under section 271(1)(b) of the Income Tax Act for non-compliance with notices during assessment proceedings. The order in this regard was pronounced in open court on 16.05.2019.